Tedder Industries - Chapter 11 APA Summary

Tedder Industries obtained court approval to sell substantially all assets of its Alien Gear Holsters firearm holster and accessories business to Safariland, a Cadre Holdings affiliate that served as stalking horse and was designated successful bidder following a competitive auction, for $10.3 million in cash plus assumption of specified liabilities and contingent accounts receivable payments, with closing set for April 7 free and clear of all liens including those held by prepetition lender Main Street Capital.

Bidding Procedures / Asset Purchase Agreement Summary

Parties Involved

Tedder Industries, LLC, a Texas limited liability company, as the Debtor and Seller. The Debtor is in the business of designing, manufacturing, marketing, and selling firearm holsters and accessories, operating under the trade name Alien Gear Holsters.
Safariland, LLC, a Delaware limited liability company, as the Purchaser.
The Purchaser is not an "affiliate" or "insider" of the Debtor, as those terms are defined in the Bankruptcy Code, and no common identity of incorporators, directors, or stockholders existed between the Purchaser and the Debtor. (In connection with the good-faith finding, the Court also found no common identity of members, managers, directors, or controlling equity holders between the Purchaser and the Debtor.)
A Confidentiality and Non-Disclosure Agreement was entered into between the Seller and Cadre Holdings, Inc., an affiliate of the Purchaser, dated Jan. 21, 2026.
Trinity River Advisors, LLC served as the Debtor's broker in connection with the transaction.

Background

On Dec. 8, 2025, Tedder Industries commenced a voluntary Chapter 11 case in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (Case No. 25-90805).
On March 17, 2026, the Debtor filed a Notice of Designation of Stalking Horse Bidder (Docket No. 126), attaching the Asset Purchase Agreement with Safariland.
On March 25, 2026, the parties entered into a First Amendment to the APA, which, among other things, increased the cash purchase price from $8,500,000 to $10,300,000, increased the deposit from $850,000 to $1,030,000, and set the Closing Date to April 7, 2026.
Following a robust auction and sale process, the Debtor determined in a valid and sound exercise of its business judgment that the Sale Transaction represented the highest or otherwise best offer available and designated Safariland as the Successful Bidder.
The Sale Hearing was held on April 1, 2026, and the Sale Order was entered on the same date.

Assets Being Sold

Substantially all of the Debtor's assets related to or used or held for use in the business, other than certain Excluded Assets, on an "As Is/Where Is" basis. Purchased Assets include:
- All inventory;
- All prepaid assets and other current assets (other than cash and cash equivalents and accounts receivable);
- All Seller Intellectual Property (other than Excluded Intellectual Property), including patents, trademarks, domain names, and associated goodwill;
- All Assumed Contracts;
- All owned and leased equipment, computers, servers, machines, tools, supplies, vehicles, furniture, fixtures, and improvements thereto;
- All personal or mixed property, whether tangible or intangible, to the extent primarily related to the business;
- All books, records, files, and documents primarily used or held for use in the business;
- Human resources materials related to Transferred Employees;
- All goodwill and other intangibles;
- Certain avoidance actions and claims against vendors, employees, suppliers, customers, or trade creditors with whom the Purchaser continues to conduct business;
- All restricted cash; and
- All claims, causes of action, rights of recovery, and rights of set-off related to the foregoing assets.

Excluded Assets

Key Excluded Assets include:
- All rights of the Seller under the APA and Ancillary Agreements and all consideration payable thereunder;
- All cash and cash equivalents;
- All accounts receivable as of the Closing;
- Company organizational documents, audit materials, legal records, board and member minutes, stock transfer books, and related records;
- Human resources materials related to Non-Transferred Employees;
- All Seller Employment Related Plans;
- Excluded Contracts and Excluded Intellectual Property;
- Avoidance actions under sections 544, 545, 547, 548, 549, 550, and 551 of the Bankruptcy Code (other than those assigned to the Purchaser under the APA);
- Claims and causes of action against any current or former manager, director, or officer of the Seller or its affiliates, or against Main Street Capital Corporation, Main Street Equity Interests, Inc., MSC Equity Holding, LLC, Main Street Mezzanine Fund, LP, or any of their respective affiliates (collectively, "Main Street"), including claims under D&O, fiduciary, and similar insurance policies;
- Claims and causes of action against the "Agent" or "Lenders" parties to the Main Street Loan Documents;
- All equity interests in the Seller;
- All insurance policies and binders and claims and proceeds payable thereunder;
- Tax receivables, refunds, credits, or prepaid taxes for any Pre-Closing Tax Period;
- All Deal Communications and associated privileges; and
- The intellectual property acquired by Seller pursuant to the Patent Acquisition Agreement, dated July 26, 2022, between the Seller and Randy Watts (relating to the "Holster and Tourniquet Device and Method of Use," commercially known as TAQ-STRAP).

Purchase Price and Consideration

The aggregate purchase price consists of:
- A cash payment of $10,300,000, payable at Closing by wire transfer of immediately available funds;
- The assumption of the Assumed Liabilities; and
- Monthly payments equal to amounts collected by the Purchaser on accounts receivable outstanding at the Closing Date, but only to the extent such amounts are collected.
The Court found that the purchase price constitutes reasonably equivalent value, fair value, and fair consideration under the Bankruptcy Code, the Uniform Voidable Transactions Act, the Uniform Fraudulent Transfer Act, the Uniform Fraudulent Conveyance Act, and any other applicable law.

Deposit

Within one business day following the effective date of the First Amendment (March 25, 2026), the Purchaser was required to deposit $1,030,000 into a non-interest-bearing escrow account with the Escrow Agent (Hancock Whitney Bank).
The deposit is credited against the purchase price at Closing.
In the event the Purchaser fails to consummate the Sale Transaction due to its breach or failure to perform constituting a Purchaser Default Termination, the Debtor and its estate shall be entitled to retain the deposit as part of the damages resulting from such breach or failure.

Assumed Liabilities

The Purchaser will assume, effective as of the Closing:
- All liabilities arising from or related to the ownership or operation of the business or the Purchased Assets from and after the Closing;
- All liabilities under the Assumed Contracts and under open purchase orders with customers and suppliers existing as of the Closing that are not yet due and owing;
- All Cure Costs payable with respect to the Assumed Contracts;
- All liabilities with respect to trade payables, accrued operating expenses, and accrued but unpaid base wages, base salary, and benefit payments included in payroll owing to all Transferred Employees employed as of the Closing, in each case incurred in the ordinary course of business and arising from and after the Petition Date, in amounts set forth on Schedule 2.3(a)(iv);
- Any severance, accrued vacation pay, or other termination payments due or paid to Non-Transferred Employees who do not receive an Offer;
- All WARN Act liabilities arising from occurrences after the Closing affecting Transferred Employees; and
- Transfer Taxes and Asset Taxes imposed for the tax period beginning after the Closing Date.
All pre-petition and post-petition liabilities of the Debtor other than the Assumed Liabilities shall remain the responsibility of the Debtor's estate and shall not be assumed by or transferred to the Purchaser.

Excluded Liabilities

Key Excluded Liabilities include:
- All taxes imposed on the Seller for any tax period or imposed on the Purchased Assets or the business for any Pre-Closing Tax Period;
- All liabilities relating to the Excluded Assets (except to the extent constituting an Assumed Liability);
- All obligations or liabilities released or discharged by the Sale Approval Order or the Plan, or by operation of the Bankruptcy Code;
- Product liability claims for products manufactured, sold, or shipped on or prior to the Closing Date;
- All indebtedness;
- All liabilities of the Seller under the APA and all legal, accounting, brokerage, investment banking, and finder's fees in connection with the Bankruptcy Case and the transactions;
- All liabilities under Seller Employment Related Plans or Seller PEO Plans (except to the extent constituting Assumed Liabilities);
- All liabilities directly or indirectly relating to any Service Provider arising on or before the Closing (except to the extent constituting Assumed Liabilities);
- All liabilities arising out of or relating to the Main Street Loan Documents; and
- All other liabilities related to the operation of the business or ownership of the Purchased Assets on or prior to the Closing that are not expressly Assumed Liabilities.

Bid Protections

Break-Up Fee: $85,000
Expense Reimbursement: up to $100,000 in reasonable, documented out-of-pocket fees, costs, and expenses actually incurred, owed, or paid to third parties (inclusive of attorneys' fees, consulting fees, accounting fees, and out-of-pocket expenses).
The Break-Up Fee is not reduced by the Expense Reimbursement.

Sale Free and Clear

Pursuant to sections 105(a), 363(b), 363(f), and 365 of the Bankruptcy Code, the Debtor is authorized and directed to transfer, sell, assign, and convey the Purchased Assets to the Purchaser free and clear of all liens, claims, encumbrances, and other interests (other than Permitted Encumbrances and Assumed Liabilities), with such interests attaching to the proceeds of the Sale Transaction with the same validity, priority, extent, perfection, force, and effect.
The Purchaser would not have entered into the APA and would not consummate the transactions if the sale were not free and clear of all interests, including rights or claims based on any successor or transferee liability.
The conditions of section 363(f) of the Bankruptcy Code have been satisfied in full.
For the avoidance of doubt, any and all interests held by Main Street Capital Corporation, as lender under the Loan Agreement dated Aug. 31, 2018, in the Purchased Assets are deemed released on the Purchased Assets and shall apply to the proceeds of the Sale Transaction.
Upon the Closing, any and all interests existing as to the Purchased Assets prior to the Closing shall be unconditionally released, discharged, and terminated.

Successor Liability

The transfer of the Purchased Assets to the Purchaser does not, and will not, subject the Purchaser to any liability whatsoever with respect to the Debtor or the operation of the Debtor's business prior to the Closing, under any theory of law or equity including successor, transferee, vicarious liability, environmental, de facto merger, business continuation, substantial continuity, alter ego, veil piercing, mere continuation, product line, products liability, or other applicable law.
The Purchaser is not a successor to the Debtor or its estate by reason of any theory of law or equity.
The Sale Transaction does not amount to a consolidation, merger, or de facto merger of the Purchaser with or into the Debtor or its estate.

Good Faith Finding

The Court found that the APA was negotiated and undertaken by the Debtor and the Purchaser at arm's length, without collusion or fraud, and in good faith within the meaning of section 363(m) of the Bankruptcy Code. The Purchaser is a "good faith" purchaser entitled to all protections afforded thereby, including in the event the Sale Order is reversed or modified on appeal.
The reversal or modification on appeal of the authorization to consummate the Sale Transaction shall not affect the validity of the sale unless such authorization is duly stayed pending such appeal.

Assumption and Assignment of Contracts

Pursuant to sections 363 and 365 of the Bankruptcy Code, the Debtor is authorized and directed to assume and assign to the Purchaser, and the Purchaser is authorized to accept the assignment of, the Assigned Contracts set forth on Schedule 2.1(d) to the APA, free and clear of all interests.
Other than Cure Amounts, there shall be no accelerations, assignment fees, increases, or any other fees charged to the Purchaser or the Debtor as a result of the assignment.
From and after the date of the APA until 60 days after the Closing, the Purchaser may, in its sole discretion, designate additional contracts for assumption and assignment or designate contracts for exclusion.
All Cure Amounts payable with respect to the Assigned Contracts (including Additional Assigned Contracts) shall be borne by the Purchaser.
All contracts and leases that are not Assigned Contracts shall be rejected by the Debtor.
Any provision in an Assigned Contract that prohibits, restricts, or conditions assignment constitutes an unenforceable anti-assignment provision that is void and of no force and effect in connection with the assumption and assignment to the Purchaser.
Upon the Closing, the Purchaser shall be deemed substituted as a party to all Assigned Contracts in place of the Debtor, and the Debtor and its estate shall have no further liability or obligation under the Assigned Contracts.
The Purchaser shall not be required to provide any additional deposit or security with respect to any Assigned Contract to the extent not previously provided by the Debtor.

Cure Amounts and Disputes

The Cure Amounts set forth in the Cure Notice are the sole amounts necessary to cure all defaults under the Assigned Contracts within the meaning of section 365(b)(1) of the Bankruptcy Code, and such Cure Amounts will be paid by the Purchaser.
The Purchaser has demonstrated adequate assurance of future performance under each Assigned Contract within the meaning of section 365 of the Bankruptcy Code.
Any Cure Objections, to the extent not otherwise resolved, are overruled. Counterparties that failed to timely object are deemed to have consented to their Cure Amount and to the assignment of their respective Assigned Contract.
Upon Closing, all defaults (monetary and non-monetary) under the Assigned Contracts shall be deemed cured and satisfied in full through payment of the Cure Amounts.
For any Assigned Contract with a pending Cure Dispute, the Purchaser shall be authorized to pay the Cure Amounts within 10 business days of the resolution of such objection by settlement or Court order. If a Cure Dispute cannot be consensually resolved, the Purchaser may determine that such Assigned Contract should not be assigned, in which case the Purchaser will not be responsible for any Cure Amounts to the applicable counterparty.

Assumed Contracts

The Assumed Contracts include, among others:
- Retail vendor agreements with Dunham's Sports, Bass Pro, Sportsman's Warehouse, Academy Sports + Outdoors, and Scheels All Sports;
- Technology and IT agreements with Celigo (NetSuite integration), Centre Technologies (managed services and server OS licensing), Data Pro Solutions, Oracle America (NetSuite ERP), Information & Computing Services (NetSuite inventory plugin), Nunya Business (NetSuite IT consulting), RF-SMART (warehouse and inventory management), Shopify Inc. (Shopify Plus), Sezzle (payment processing), Ramp Business Corporation (corporate card and expense management), and Avalara (tax compliance);
- Marketing and service agreements with Avant Marketing Group (affiliate network), Effective Training Combatives (marketing influencer), and The Trade Group (trade show services);
- Insperity MidMarket Client Services Agreement (PEO services) and Loop (returns management software);
- Employment, noncompetition, and IP rights agreements with Thomas Magrath and Jason Femrite, and Employee Noncompetition, Confidentiality, and Inventions Agreements with each Transferred Employee;
- Patent License Agreement, dated Sept. 7, 2021, between Point Blank Enterprises, Inc. and Tedder Industries;
- Confidential Settlement Agreement and Mutual General Releases, dated March 6, 2018, among AllienGear Universal, LLC, and related parties; and
- Settlement Agreement, dated Jan. 5, 2021, between Seller and Dell Inc.

Intellectual Property

All Seller Intellectual Property other than the Excluded Intellectual Property is included in the Purchased Assets. The Debtor's IP portfolio includes over 30 U.S. patents, approximately 20 active registered trademarks, and more than 60 active domain names.
The Excluded Intellectual Property consists of the IP acquired pursuant to the Patent Acquisition Agreement, dated July 26, 2022, between the Seller and Randy Watts, relating to the "Holster and Tourniquet Device and Method of Use" (commercially known as TAQ-STRAP), including U.S. Patent No. 11,291,460 and related patent applications. Under the Watts agreement, the Seller agreed to pay a royalty equal to 5% of revenue from products incorporating the patents, subject to escalating minimum annual payments.
Prior to the Closing Date, the Seller is required to complete certain IP Remediation Activities, consisting of filing and recording assignments or other documentation with the USPTO to reflect the Seller as the record owner of four specified patents (Dual Pivot Drop Thigh Mount, Locking Belt Slide, Duty Holster, and Active Carry Holster Assembly).
After the Closing, the Seller may not conduct any business under any entity name that includes "Alien Gear" or any confusingly similar derivation thereof, or use any materials bearing such names.
The IP portfolio is subject to certain encumbrances and agreements:
- A reciprocal, worldwide, royalty-free, non-exclusive, perpetual patent license agreement with Point Blank Enterprises, Inc. (d/b/a Gould & Goodrich) relating to auto-retention and duty holster technology;
- A trademark coexistence and settlement agreement with Dell Inc. relating to Dell's ALIENWARE marks and Seller's ALIEN GEAR marks, under which each party acknowledges the other's rights in their respective marks for their core product categories; and
- A confidential settlement agreement with AlienGear Universal, LLC, under which the Seller retained the right to sell concealed carry holsters and related firearm accessories under the "Alien Gear Holsters" mark but agreed not to sell "Class 25" goods (including steel-core belts) under the ALIENGEAR marks.
The Company is unable to locate executed invention assignment agreements from Igor Shirobokov, a former employee.

Cybersecurity Incident

On Aug. 7, 2024, Tedder Industries experienced a ransomware incident attributed to the FOG threat group following a phishing attack that compromised administrator credentials. The threat actor installed remote access software, moved laterally across systems, and deployed ransomware that encrypted certain files and caused temporary disruption to operations.
A ransom payment of approximately $500,000 was made through a third-party incident response provider to obtain decryption tools and expedite system restoration. The payment was covered by the Company's cyber-insurance policy, and sanctions screening was conducted consistent with standard incident response procedures.
The Company successfully restored affected systems and resumed normal operations. The forensic investigation identified evidence of unauthorized access and file browsing on certain systems but did not identify confirmed evidence of data exfiltration. The last confirmed threat actor activity occurred on Aug. 11, 2024.
Following the incident, the Company implemented remediation measures including disabling compromised accounts, removing unauthorized remote access software, decommissioning the affected VPN tunnel, deploying SentinelOne endpoint detection and response, engaging Centre Technologies as managed IT and cybersecurity provider, and implementing company-wide cybersecurity awareness training and strengthened access controls.

Employee Matters

Prior to the Closing Date, the Purchaser shall make written offers of employment, conditional and effective on the Closing Date, to all Identified Employees. Identified Employees who accept an Offer and commence employment with the Purchaser on the Closing Date become "Transferred Employees." Those who decline or do not commence employment become "Non-Transferred Employees."
On the Closing Date, the Seller shall terminate the employment of all Identified Employees.
No Service Providers are or have been since Jan. 1, 2022, represented by a labor entity in respect of their services to the business, and neither the Seller nor any of its affiliates is a party to any labor agreement in respect of the business.

Legal Proceedings

Arden Silverman dba Capital Asset Protection v. Tedder Acquisition, LLC, et al., Case No. 2:24-cv-06989-MRA-MAA — Federal civil contract dispute originally filed in Los Angeles County Superior Court and removed to the U.S. District Court for the Central District of California. An amended complaint has been filed; a motion to dismiss is pending; the litigation is impacted by the bankruptcy filing and automatic stay as of late 2025.
Tedder Industries, LLC v. Goldman Sachs Capital LLC, et al. — Civil action asserting RICO, fraud, and contract claims relating to ERC services, filed in the U.S. District Court, Central District of California. Stayed in connection with the Debtor's Chapter 11 filing.

Financial Overview

Selected historical financial data:
- FY 2022: Total revenue of $23.3 million; gross profit of $12.4 million (53.1% gross margin); operating loss of ($3.0 million); net loss of ($5.6 million); Adjusted EBITDA of $2.3 million (9.9% margin).
- FY 2023: Total revenue of $20.5 million; gross profit of $12.5 million (61.3% gross margin); operating loss of ($6.2 million); net loss of ($4.4 million); Adjusted EBITDA of ($1.1 million) (-5.3% margin).
- FY 2024: Total revenue of $22.1 million; gross profit of $12.9 million (58.1% gross margin); operating loss of ($4.5 million); net loss of ($7.0 million); Adjusted EBITDA of $0.4 million (2.0% margin).
- FY 2025: Total revenue of $20.9 million; gross profit of $13.0 million (62.2% gross margin); operating loss of ($1.9 million); net loss of ($4.7 million); Adjusted EBITDA of $2.8 million (13.2% margin).
As of Dec. 31, 2025: Total assets of $14.5 million; total liabilities of $26.7 million; total equity deficit of ($12.2 million). Long-term liabilities included the MSEI Term Loan ($18.6 million), MSIF Term Loan ($4.7 million), MSEI LOC ($1.3 million), and MSIF LOC ($0.3 million).

Conditions to Closing

Mutual conditions include:
- No Legal Restraint shall be in effect restraining or prohibiting consummation of the transactions;
- The Bankruptcy Court shall have entered the Sale Approval Order, and each of the Bidding Procedures Order and Sale Approval Order shall be Final Orders and shall not have been stayed; and
- No Material Adverse Effect shall have occurred.
Conditions to the Purchaser's obligations include:
- Seller's representations and warranties shall be true and correct in all material respects;
- Seller shall have duly performed and complied in all material respects with all covenants;
- Seller shall have delivered all required closing deliverables;
- The Bankruptcy Court shall have approved the assumption and assignment of each Assumed Contract (except as would not have an adverse effect on the business in any material respect);
- Seller shall have delivered evidence that all IP Remediation Activities have been completed.
- Conditions to the Seller's obligations include:
  - Purchaser's representations and warranties shall be true and correct in all material respects;
  - Purchaser shall have duly performed and complied in all material respects with all covenants; and
  - Purchaser shall have delivered all required closing deliverables.